A top White House goal this year is to slash child poverty by sending monthly checks to parents starting in July.
“We will lift half of America’s children out of poverty,” Vice President Kamala Harris said Friday, calling the anticipated policy achievement her favorite thing about her job.
The reduction of child poverty is not a done deal, however. Since the checks are technically tax credits, it’s up to the Internal Revenue Service to send the money, but the agency may struggle to reach some of the millions of people who don’t file federal taxes.
To that end, Harris appeared at a Washington, D.C., child care center to promote the expanded child tax credit that congressional Democrats approved as part of the American Rescue Plan, and to announce a new “Child Tax Credit Awareness Day” on June 21.
“I’m here to ask you all, as leaders, to be a part of that of lifting up awareness of what has been designed to help folks, to make sure they know,” Harris told a group of teachers and administrators at the child care center. The IRS also has a promotional awareness day for the earned income tax credit.
The American Rescue Plan that Congress passed in March increased the child tax credit from $2,000 per child to $3,600 per child under 6 and $3,000 per child under 18. And instead of just reducing people’s tax bills, the IRS will distribute the credit as an advance payment starting next month. The vast majority of households with children will get payments of $250 or $300 per child.
The money for parents could dramatically change politics, providing a monthly benefit for middle class and poor parents alike, similar to the kind of child allowance other wealthy nations have long offered parents.
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Roughly 12 million Americans did not file federal income taxes in 2020 because there’s no filing requirement for people who don’t earn enough income to owe federal tax. As many as 10% of children live in non-filing households that should be eligible for the payment, according to an analysis of IRS data by the People’s Policy Project, a left-wing think tank.
The IRS partnered with the Social Security Administration to send coronavirus relief checks to many of them, but still missed several million.
“The IRS has no way of reaching kids in non-filing tax units and no one has produced a plausible story of how they will do so,” PPP founder Matt Bruenig wrote last month. “Filing taxes is complicated and the poorest of the poor cannot afford to pay a third-party preparer to do it for them.”
IRS commissioner Chuck Rettig told a Senate hearing this week that the IRS has partnered with more than 10,000 local organizations to get the word out about the credit.
“Individuals don’t always go to IRS.gov to get their information, so we’re working with literally thousands and thousands of community-based organizations around the country to distribute information,” Rettig said.
Rep. Richard Neal (D-Mass.), one of the principal authors of the child tax credit legislation, said Friday the IRS would create a new online portal this month where non-filers could enter their information in order to get the payments.
“These advance payments of that credit will ensure families receive this crucial support when they need it most, all while making dramatic reductions in child poverty,” Neal said.
But the estimates of how much the new tax credit will reduce poverty incorporate the full amount of the benefit. Parents will only receive half this year, since monthly payments are starting in July, and will get a lump sum for prior months at tax time next year. And then the expanded credit expires.
Democrats and President Biden have said they’ll pass legislation to extend the credit through 2025, but have not yet introduced legislation to do so.
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